Is it actually smart to lease a Tesla?

[jelloslug]

I lease my last two EVs (Nissan Leaf and BMW i3) for two reasons:
1) The short range was fine for every day driving but not so good for trips.
2) The special lease offers for both of them were a great deal.
I purchased the Model S though because range is not really an issue with this car. Because of the longer range it has become our primary car so the mileage limitations of a lease just would not work.

 

[Skipdd]

I leased. It wasn't really a financial decision, at least not one based on lowest cost. My reasons:
1) Lower Risk - if things didn't work out for Tesla or I didn't like the car, I could finish up my lease and walk away. I LOVE the car
2) Technology in the car is changing rapidly. I'd rather not deal with the hassles of selling vs just getting a new car
3) Leasing gives the option to buy it out at the end. If I did that, I'd probably split the payment between cash and a loan (prob home equity). Although purchase is cheaper, I prefer to not deplete cash by that amount - just a comfort thing

I chose the 15k lease and am way over the monthly average. My plan is to re-up somewhere between year 2 and 3. Will begin discussions with Tesla on that next summer

 

[wesley888]

1) Lower Risk - if things didn't work out for Tesla or I didn't like the car, I could finish up my lease and walk away. I LOVE the car
2) Technology in the car is changing rapidly. I'd rather not deal with the hassles of selling vs just getting a new car
3) Leasing gives the option to buy it out at the end. If I did that, I'd probably split the payment between cash and a loan (prob home equity). Although purchase is cheaper, I prefer to not deplete cash by that amount - just a comfort thing

I like to lease as well, with same reasons as Skipdd listed. If you buy, you have to pay sales tax for the entire car. That's a lot more money paying up front.

But I purchase the car this time due to the full self driving (FSD). I know that it won't be available for at least a couple of years (and likely way longer). Leasing a call with FSD totally do not make sense. So, purchase it is. Now that with the super charger changes, more of the reason to purchase it.

 

[brkaus]

I like to lease as well, with same reasons as Skipdd listed. If you buy, you have to pay sales tax for the entire car. That's a lot more money paying up front.

This depends on state law. Texas, for example, requires tax payment on the full lease price.

 

[Jtrader]

I took over an exiting lease for 30 months at $1,108/mo with only $500 in lease transfer fees. I figured that I would want a newer version by 2019.

 

[mspohr]

I took over an exiting lease for 30 months at $1,108/mo with only $500 in lease transfer fees. I figured that I would want a newer version by 2019.

I have the same payment on a 60 month loan... At the end I own the car.

 

[Doubletap67]

I leased because it made sense from a tax perspective. But beyond that I don't see that there's a big difference. As somebody noted, they're both methods of financing.

In my case, I'm about a year away from the end of my 3 year lease. There is no way that the vehicle is going to be worth as little as the residual. So I intend to buy it out for the residual, resell it, and apply the gain to a new 100D / 110D, or whatever else is available by then.

Doesn't buying it for the residual and then reselling it end up being sales taxed twice? Once you on the sale by Tesla and one to the new owner when the car registration is changed? I'd think the sales tax we have to pay in Canada (at least how it works in BC) would consume any advantage.

 

[RacerX]

On my 2013 Model S I had 55,000 miles in 2 years. That was just my regular driving. No Cross Country trips. So couldn't lease.

 

[MXWing]

One more issue which I had not foreseen in the least vs buy argument:

Leasing a Tesla and rolling up EAP and FSDC into the monthly payment or even adding it later.

1 - You never see the features you leased.
2 - You pay a premium price to add later and only get it for a short amount of time.

 

[Bebop]

Does anyone have any experience with overage?

I for sure will be driving way more than 15K miles a year. I'm curious if anyone who has a lease now can verify if there is a mileage overage cost. and what that cost is per mile over?

 

[mal_tsla]

$0.25 per mile overage fee.

 

[Bebop]

$0.25 per mile overage fee.

Good to know thank you!

 

[hmmm]

Does anyone have any experience with overage?

I for sure will be driving way more than 15K miles a year. I'm curious if anyone who has a lease now can verify if there is a mileage overage cost. and what that cost is per mile over?

25 cents indeed. Also, make sure to do the math...in some instances (in mine at least) it may be cheaper to do a 10k lease and pay the incremental at 25 cts a mile than do a 12k or 15k lease right from the start, all else being equal.

I think this was an oddity of the 2yr leases in Q3 last year, but worth double-checking.

 

[Skipdd]

One more issue which I had not foreseen in the least vs buy argument:

Leasing a Tesla and rolling up EAP and FSDC into the monthly payment or even adding it later.

1 - You never see the features you leased.
2 - You pay a premium price to add later and only get it for a short amount of time.

Good point. I think the folks that purchased EAP thought they'd get it much sooner. Definitely an issue for FSD. Personally I never saw the value in pre-paying for FSD with no reliable date on when it could be delivered.

 

[mal_tsla]

Definitely true about FSD and leases. With a lease, we need features available on day 1 or they can wait until the next lease.

 

[mspohr]

25 cents indeed. Also, make sure to do the math...in some instances (in mine at least) it may be cheaper to do a 10k lease and pay the incremental at 25 cts a mile than do a 12k or 15k lease right from the start, all else being equal.

I think this was an oddity of the 2yr leases in Q3 last year, but worth double-checking.

One thing I've discovered is that I drive a lot more in the Tesla than I ever did in my other cars. The car is just so enjoyable to drive and it's "fossil fuel guilt free" that I find I do a lot more driving, both locally and a lot of long trips.
I'm glad I bought the car since I have driven about 25,000 miles a year whereas my other cars were driven less than 15,000 miles.

 

[richard14]

Doesn't take a genius to figure this out.
The first generation of model s were kinda janky by comparison to 2016.5+
Not to mention the brand is only more established now and higher quality.
2014 cars are for sale on tesla recertified and privately for approx 31% off sticker price 3.5ish years later.
Your 3 year lease (depending on when you start it) will likely end when a new appearance model comes out although tesla seems to like the grille less look now. The tech is supposed to be good enough for full auto with upgrades being 2-3k or hinted at being free if you pre purchase FSD.
2014 MS don't have any of those options.

So I'd wager that a 2017 MS - fresh off the line - will undergo less depreciation compared to a 2014 in its first 3 years of life.

So estimate 25-30% versus 30-35% for 3-4 year old model s on market TODAY.

81750 for a decent model S 87472.5 after tax
47209 for a 3 year lease.
Buying and reselling a brand new card would likely result in 61230.75 after 3 years.
Leasing a new car would result in 40263.5

This is a REALISTIC 15,000$ loss compared to just buying the thing, and then selling it on open market after 3 years.
You're giving away 16% of your car for free over 3 years or paying a 5% yearly premium to be able to get rid of it at a prearranged value rather than trusting the market valuation on used vehicles.

Anyone (excluding weird tax scenarios where one has a huge advantage) who thinks leasing is a smart idea is not too smart.
Tesla leases seem to be on the higher end of pricey with the devaluation on Teslas predicted to diminish as their reliability and value increase.

In all fairness 90k for a 60kwh 5 year old car that just cant go far enough for you on the resell market is going to take a huge hit.
A 75k car that has 25% more battery capacity and significantly better all around specs and being sold in the used price range of 45-50k is open to alot more buyers.